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How is "% of CSS To Be Treated as Essential" different from Expenses?

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 NC
(@nc-cpl)
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Uncertain of the difference. Always thought of Non-specific discretionary spending (shown as CSS in 2023) as funds you can spend "over and above" your expenses as entered in the Expenses page. Think of it as your fun money. But now its asking what percentage should be considered "essential" so not sure if or how this overlaps with Expenses page entries.


   
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(@hines202)
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I think perhaps for gray area things? For example, I may have $600 month in groceries as essential spending. Ya gotta eat! But I may also have $600/month in restaurants as non-essential spending. But, if times get hard, that will be dropped from the budget right? Yet, you certainly can't then get by on $600/month groceries, so this may be why that feature exists, to bump up some of the non-essentials and fix this problem. Other gray area items may be pet care, etc.

I've also seen plenty of clients that don't detail their phased expenses, it's all very high level and thus can't be broken out into essential and non-essential. They just put a big round number there (i.e. $60,000). I don't advise this, spend sometime doing a rough budget! Using the setting you reference is a way to fix that for smoothed consumption spending, at least.

Or, you could just ignore this setting and consider any 'extra' spending indicated as all non-essential, if you've already laid out all your non-essential minimum dignity floor expenses (and good job if you have).


   
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 NC
(@nc-cpl)
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@hines202 Bill....Pet care as a "non-essential?" Shame!


   
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 NC
(@nc-cpl)
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I do see the value of it of course. I do, in fact break down expenses and now have almost 50% classified as essential. I think I was expecting that percentage to also appear in the box below the CCC smoothed spending number. So let's say I've designated half of my expenses as essential on the Expenses page. The field labeled "% of CSS To Be Treated as Essential" stays empty, not filled in with 50% as I was expecting. So now it's empty - what happens if you enter 25(%) in this field?

This post was modified 5 days ago by NC

   
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(@hines202)
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@nc-cpl Not in my dojo! I've seen people say it, maybe the goldfish? But our Bichon is a bona fide member of the family, in fact queen of the household 🙂


   
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(@hines202)
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@nc-cpl If you put 25% in that box, I'd expect PRC to categorize any extra spending allowed, up to that 90% success rate, to be categorized as essential. This should then be reflected in the breakdowns of success rate by essential spending and overall spending.

So, if you have 50% of phased spending designated as essential already with specified expenses, then do smoothing and PRC says you can spend another $10,000 per year and stay within 90% chance of success, and you put 25% in that CSS box, I think it would then adds $2,500 to your existing total for essential spending and factor that into the success rate for essential spending.


   
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 NC
(@nc-cpl)
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@hines202 Hmmm..if that's correct, I might file this under "example of over-engineering." I think sometimes taking a more straight-line, single path approach to a task is better suited to the masses. Less opportunity for misinterpretation or incorrect data entry.

This post was modified 5 days ago by NC

   
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(@hines202)
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@nc-cpl I don't think so. Again, the many folks that don't break their expenses down to essential/non-discretionary and non-essential/discretionary need this setting.

Otherwise, it can be ignored. Arguably, there could be a 'simple' mode and advanced mode to expose higher-fidelity settings. Maybe that will be in the web-based version. Folks are always free to go to one of the many dumbed-down tools out there, like New Retirement, but good luck basing your retirement on those low-fidelity, imprecise solutions.


   
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